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Minimum wage laws are shaping up to be a key issue ahead of the impending federal election.

Last week submissions closed for the 2018-19 Annual Wage Review and received sizeable media coverage, particularly off the back of the ACTU proposing a six per cent increase to create a ‘living wage’.

With the backdrop of an election in May the NRA does not want to see the minimum wage become a political football by politicians making populist announcements.

The NRA has always supported a minimum wage that strikes the right balance between fairness and affordability, and in the current economic climate that approach is more relevant than ever.

As you would all be aware, the retail sector is hardly booming at the moment and a couple of weeks ago the ABS revealed that Australia was technically in a per capita recession (although not in a recession by the traditional definition of the term).

Retail continues to battle with low increases, or even decreases, in the real price of goods. Indeed, in the 12 months to December 2018, only the food and non-alcoholic beverages & alcohol and tobacco categories recorded growth in prices. It should also be noted that in the case of alcohol and tobacco, the rise was principally due to the increase in government excise that did not benefit the retailer.

An excessive increase to the minimum wage – even if well intended – in the current economic conditions can seriously jeopardise the jobs of the lowest paid workers in the country.

It is for this reason that the NRA has recommended a minimum wage increase of no more than 1.8 per cent, in line with the proposal from the Australian Chamber of Commerce and Industry submission.

Ultimately, any decision on the rate of minimum wage will be a matter for the Fair Work Commission and not whichever political party forms government. However, politicians of all stripes should keep in mind that the businesses that will be hardest hit by a dramatic increase in labour costs will not be big multinationals, but mum-and-dad small businesses and consequently the people they employ.

I hope you have a great week!